Geopolitical tension remains extraordinarily high today as fighting continues in Ukraine. Investors, meanwhile, are responding to the crisis, which has seen oil prices soar, by looking for stocks that could potentially prosper from the situation -- stocks like Plug Power (PLUG 0.51%), which is hitting a mark it hasn't seen since earlier in January.
With the fuel cell specialist's stock rising as much as 14% earlier in the trading session, investors may now wonder if it's too late to pick up shares or if there's still potential for Plug Power to pop even higher.
NASDAQ: PLUG
Key Data Points
Global interest in adopting hydrogen solutions has ramped up considerably over the past few years. Plug Power has benefited from this enthusiasm, and the company has emerged as one of the leading fuel-cell-oriented businesses. But the bullish fervor surrounding the stock belies some serious concerns.
For one, Plug Power has consistently failed to show a profit for all of its success in securing customers and growing revenue. In 2020, Plug Power posted earnings per share of negative $1.68 -- a far steeper loss than the negative $0.39 and negative $0.36 that it reported in 2018 and 2019, respectively.
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In addition to the steady losses, Plug Power's ongoing inability to generate positive cash flow is a concern. It aims to construct green hydrogen facilities capable of producing 1,000 tons daily by 2028. Developing assets such as these doesn't come cheap, and the company -- unable to generate cash organically -- will need to continually turn to the debt and equity markets to finance its growth.
Until the company turns a corner and proves that its fuel cell and hydrogen production endeavors can be profitable, Plug Power should only be a consideration for those investors with ample tolerance for risk. Fortunately for those who are on the prowl for a renewable energy stock to mitigate the risk related to the current volatility in the energy markets, there are plenty of other compelling choices to consider.
